Marketing Strategies Case Study

Starbucks in 2005: Sustaining Growth

OR

Abstract:

Starbucks has been growing from strength to strength in the last two decades at an average annual rate of 20% At the heart of Starbucks’ success is a unique business model based on its products, in-store experience, service, human resource policy and domestic expansion strategy. In March 2005, Starbucks has pushed its long term growth target from 25,000 stores to 30,000 stores while sustaining the 20% annual revenue growth over the next three to five years. According to James Donald (Donald), CEO Starbucks, half of the 30,000 new stores would be overseas.

To meet its ambitious growth targets, Starbucks has to cope with predictable challenges of becoming a mature company in the U.S. Its famed human resource policy is proving a drain on its resources. Abroad, Starbucks is still far from successful. As 2005 goes underway, Donald and founder, Howard Schultz (Schultz) realize that they have to chalk out a fresh international strategy and reinvent their domestic strategy to sustain growth.

Pedagogical Objectives:

• The case outlines Starbucks’ unique business model, products, in-store experience, service, human resource policy and domestic expansion strategy
• The case also discusses its international expansion strategy.

Keywords : Coffee, Expansion, Marketing Strategies Case Study, Retail, Starbucks

Contents:

• Background
• Building the US operations
• Overseas expansion
• Looking Ahead